The U.S. ended the Group of 7 summit in Japan with an agreement by member countries to explore new restrictions on outbound investments into China and a strategy to de-risk with regard to certain aspects of the country’s economy, a result President Joe Biden said “showcased the unity of purpose” of the G-7 leaders toward Beijing. The countries also emphasized the importance of multilateral export controls, agreeing to increase cooperation on restrictions over dual-use technologies.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
DOJ is helping to oversee more cases before the Committee on Foreign Investment in the U.S., particularly those involving sensitive U.S. personal data, said Matthew Olsen, the agency’s assistant attorney general for national security. He said DOJ is now “co-leading” with the Treasury Department about one-fourth of CFIUS reviews, “if not more,” a significant increase from previous years.
The Treasury Department ‘understands” the challenges faced by banks, law firms, companies and others in trying to comply with multiple Russian sanctions regimes across the U.S., the EU and elsewhere, and is working to better align those restrictions to alleviate some headaches, said Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence. Nelson, speaking during a law conference in Washington last week, said the agency is “working hard” to harmonize “our actions, our targets, the guidance that we're providing so that they are consistent across our jurisdictions.”
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
DOJ and Commerce Department are increasingly looking to impose large penalties for significant export control and sanctions violations as part of a mission to incentivize more voluntary disclosures, said Matthew Olsen, DOJ’s assistant attorney general for national security. Olsen, whose agency and Commerce co-lead the new Disruptive Technology Strike Force, said he recently “made a couple of trips to companies directly” to speak with them about their compliance programs, and is hoping to “encourage” them to submit disclosures.
The Treasury Department could use more resources and needs to better recruit and retain employees to implement and enforce its sanctions programs, said Brian Nelson, the agency’s undersecretary for terrorism and financial intelligence. Nelson, speaking during a law conference in Washington last week, said the agency is specifically looking to hire more officials to help it grapple with how best to apply sanctions in the virtual assets space and other emerging industries, including around artificial intelligence.
Companies should be constantly assessing their export control compliance procedures because of the unprecedented pace of regulatory changes, which makes it “easier to be caught,” said Tamer Soliman, a Mayer Brown trade lawyer, speaking during a law conference hosted by the law firm last week. He said the government is “scrutinizing more and more transactions,” particularly as it tries to target Russian sanctions evasion attempts.
The Bureau of Industry and Security fined a United Arab Emirates company $283,500 for failing to report boycott requests in violation of BIS’ antiboycott regulations. Dubai-based Regal Beloit FZE, a subsidiary of U.S. manufacturer Regal Beloit America, didn’t report 84 requests from a Saudi Arabian customer to stop importing Israeli goods “in fulfillment” of the customer’s purchase order, BIS said.
The U.S. is preparing to roll out a “substantial package” of new sanctions and export controls against Russia for its war in Ukraine, including by adding about 70 new entities to the Commerce Department’s Entity List and introducing more than 300 new financial sanctions against people, entities, vessels and aircraft, a senior administration official said. The measures, which will be coordinated alongside allies as part of the Group of 7 summit in Japan May 19-21, are aimed at closing “loopholes” used by Russia to evade sanctions and “extensively restricting categories of goods key to the battlefield,” the official said during a May 18 call with reporters.
The Office of Foreign Assets Control reached a $3.3 million settlement this week with a California-based skincare company and a $175,000 settlement with its former unnamed senior executive for illegal exports to Iran in violation of U.S. sanctions. Murad, owned by multinational company Unilever, worked with distributors in Iran and the United Arab Emirates to ship goods to Iran, leading to at least 62 exports worth more than $11 million, OFAC said.